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The Economics of Spite

The origin of the phrase “cutting off your nose to spite your face” is found in the lives of the saints. Specifically: in the life of an ancient Christian nun, St Ebba the Younger of Coldingham.

St Ebba was the abbess of a convent during the 9th Century, when England was frequently attacked by barbarians (Danish pirates AKA the Vikings). Barbarians, as it turns out, felt especial entitlement to the ravaging of monasteries and the ravishing of virgins. This heady combination left holy sisters in a highly vulnerable space. Especially as the belief at the time was that a violation of one’s chastity vow, voluntary or otherwise, was an automatic exclusion from the Kingdom of Heaven.

St Ebba and her spiritual daughters achieved sainthood when they gathered together in advance of an attack, and used razors to slice off their noses and upper lips. The Vikings were so aghast at the spectacle that they ran away. Then, in rage, they returned and torched the convent and its inhabitants, crowning St Ebba and her sisters with the crown of holy martyrdom.

Oddly, the “spite” in this story is applied to the nuns for their self-mutiliation. And not to the barbarians who burned a convent alive because they didn’t get the raping spree that they felt they were due.

Before I get to some of the social experiments that have happened around spite, I’m going to start with some definitions.

What Is Spite?

Stephen Dubner and Steve Levitt spend a fair amount of time floating around this problem of a definition, and trying to separate it from “revenge”. Basically, where they end up:

“Spite is a behavior where an individual is ready to harm him or herself at their own cost in order to harm somebody else without creating anything good for a third party.”

Which seems a totally boring definition for such an interesting vice.

I prefer that old folk tale about a genie who offers to grant a man any wish, with the caveat that his (hated) neighbour will get double whatever he wishes for. And that man says “I wish for you to put out one of my eyes.”

But having reached their definition, the Steves moved off in a direction that went something like:

But, you know, we’re not considering the fact that there are other benefits at play here.

Isn’t there an emotional benefit in seeing your neighbour put down?

Forget homo economicus – we’re homo rivalis.

It’s not about how much you get, it’s about getting more than the other guy.

So when we’re looking at this – we’re looking at it all wrong.

The trouble is: we just don’t understand what the benefits are in the mind of the person that we see as “spiteful”.

Because if there’s an emotional benefit that outweights the physical cost, then spite doesn’t really exist…

To be honest, I think that this tangent sounds a lot like an economist trying to make out that people are rational. As in: “Ignore how this looks from the outside, people are rational, and thus, spiteful people are just making rational decisions!”

Because I think spite quite clearly exists. We can be relatively objective in examining the benefits here. Let’s take the genie example. It is objectively clear that the man could have wished for unlimited wealth and happiness, and eternal life to enjoy it infinitely. But instead, he chooses to forgo all of that in favour of blinding someone that he hates. This is not ‘rational’ decision-making. It’s myopic decision-making (which is far from rational).

So now, let’s turn to the experiments.

Experiment Number 1: The Ultimatum Game

The game in the study works as follows:

Two players must decide how to divide a sum of money between them.

Player 1 gets to decide the split.

Player 2 gets to either accept or reject the split.

If Player 2 rejects the split, then both players leave with nothing.

An example:

The sum of money is $100.

Player 1 decides on a 50:50 split.

Player 2 accepts.

Both players leave with $50 each.

Another example:

Same sum of money.

Player 1 decides on a 90:10 split.

Player 2 rejects.

Both players leave with nothing.

Now in that second example, the real question is: why did player 2 reject the split?

After all, he could have had $10. Which is $10 more than he had before.

Only he decides not to take that $10 in order to force someone that he doesn’t know to not have $90.

The results in practice

The study found that:

Anything less than an 80:20 split was usually rejected.

However, if the decision is delayed, then people rejected the “unfair” split less often.

That is: if you take us out of the heat of the moment, we tend to taking an ‘unfair’ option that gives us more money than we had before the option existed.

That said, this experiment is not all that clean. Despite what it suggests, there is still the possibility that some notion of social justice, or a desire for equality, is getting in the way.

What we need is an experiment that really cuts Player 2 out of the equation – because Player 2 may have some sense of being “socially-wronged”.

Experiment 2: The Pure Spite Experiment

Benedikt Herrmann is an economist that has devoted much time to the topic of spite in experimental economics. He has played with the Ultimatum Game rules to produce the following variant:

Players 1 and Player 2 are both given $100.

But Player 1 is given the option of surrendering $10 of his allocation in exchange for destroying $50 of Player 2’s allocation.

The results?

About 10% of the subjects routinely took Mr Herrmann up on his offer.

Herrmann calls these individuals “difference maximisers”.

I would call them…something more graphically descriptive.

Whatever you call them, when you extrapolate those findings out, the implication is that roughly 10% of people have a tendency to create conflict and chaos for no reason other than being excited to see suffering happen.

The One Possible Consolation

As Steve Levitt points out, this did take place in a lab, where Player 2 was faceless. In the real world, there is more social convention and Player 2 has a face. And the social convention and the non-facelessness of Player 2 would, I guess, restrain this 10%.

Only, that consolation seems flawed

The alternative explanation: this experiment took place in a lab where the test subjects knew that they were being watched – and in particular, they knew that their individual reactions were being watched.

What happens when you take those same subjects and insert them into a mob or a faction, where personal responsibility gets lost in the cause of the group as a whole?